by Ian Johanson
Beacon Managing Editor
The Beacon published a press release July 13 which may have conveyed the impression that an established factory home builder named S2A Modular, with operational plants in other states, will soon be manufacturing modular houses in a new factory in Sheboygan.
“With plants in California, Florida, and Texas,” the press release states, “S2A Modular plans to open its fourth plant in the City of Sheboygan.”
It continues, “Since its inception, S2A Modular has emerged as a leading innovator in smart home design, modular construction, Net Zero and Net Positive energy efficiency. By utilizing the latest modular construction methods, S2A Modular can produce large quantities of homes in each of their MegaFactories to meet the growing needs of the communities they serve.”
Following a phone call to The Beacon from a reader requesting further research be done on the company, further fact-checking and inquiry has made clear that S2A Modular does not yet have any operational factories in the United States and has not yet manufactured any homes. The company’s first factory is currently under construction in Patterson, CA.
In response to questions from The Beacon regarding the current status of S2A Modular, Chad Pelishek, the Director of Planning and Development for the City of Sheboygan, said in an email that the city was aware of the company’s current production status.
On the company’s Frequently Asked Questions webpage, in response to the question, “Are there any model homes available for viewing?” the page gives a date of “Q4 of 2021” for the beginning of production. When provided this information, Pelishek replied, “That is correct they have not manufactured homes yet.”
S2A factories in California, Texas and Florida “are all in different phases of construction,” according to Robert Knoll of the S2A corporate communications team.
The press release was posted by the Mayor’s Office on the City of Sheboygan website, and was republished in the July 13 Beacon after receiving it from the Sheboygan County Economic Development Corporation via email.
When questioned by The Beacon if the press release statement regarding “plants in California, Florida, and Texas” was misleading, given the company’s current lack of operating factories, Pelishek replied, “The state[ment] does not reference operating plants and can be interpreted many ways.” Knoll added, “The term ‘sites’ probably could have been used.”
Pelishek said the city understands that “this is startup company that is working to expand their operations across the United States.” As part of its due diligence, the city has “connected with other communities that organization is developing on as reference checks. Understood they are in an investment and capital raising [phase] of the project.”
The signed purchase offer, which is publicly available, for 40 acres of vacant land in the SouthPointe Enterprise Campus on the south side of Sheboygan to S2A Investments 22, LLC, has a purchase price of $825,000. Earnest money of $20,000 has been paid, with the balance due at closing, which is specified to be no later than Nov. 30, 2021. The purchase price is contingent upon the company obtaining $188,734 in renewable energy incentive funds.
According to Pelishek, “S2A will be under a binding developers agreement to generate at least $18,200,000 in taxable value. Until this threshold is reached, the City of Sheboygan will not be paying out any city incentive towards the project. If the minimum investment threshold is not met, S2A will need to make the up the difference in taxes through a shortfall payment to the city.”
The Beacon is supportive of the city’s efforts to develop new and creative manufacturing capabilities in housing, and certainly hopes the project ultimately proves successful. However, we feel some information as stated in the press release required correction and clarification. We look forward to reporting on further developments of this project.